One of the major bills to pass this year, HB25-1249, Tenant Security Deposit Protections, makes some key changes to statues around security deposits in Colorado. This law goes into effect on 1/1/2026.
Key changes:
Uncleanliness is now part of normal wear and tear. The new definition of “normal wear and tear” is “deterioration, damage, or uncleanliness that occurs, based upon the use for which a rental unit … is intended or reasonably and typically used, without negligence, carelessness, accident, or abuse of the premises … by the tenant or home owner or members of the tenant’s or home owner’s household or their invitees or guests.” This definition of normal wear and tear does not include “uncleanliness that renders a dwelling unit substantially less clean than the dwelling unit was when the lease began.”
This has major implications for holding a resident responsible for cleaning a rental property on their way out the door. Good photos and evidence will be needed to determine the cleanliness level a property was when the lease started, vs. when the lease ended. Without that evidence, it will be hard to justify a cleaning charge, regardless of how dirty a property is when the resident turns a property back over to the manager or property owner.
Walkthroughs with residents now required. If your outgoing resident requests a walkthrough with you, you are obligated to provide it to them, at a time that is mutually convenient to the parties, before the termination of the lease, after the resident has had the opportunity to remove furniture. This walkthrough can be done via telecommunication-assisted means, or in person, and is done to identify, in writing, any damage or condition beyond normal wear and tear. This written report is not binding, however, if you fail to comply with this walkthrough statute, you forfeit the right to withhold any portion of the deposit.
Additional documentation and written statement now required. If you haven’t already been doing so, you are required to provide a written statement and relevant documentation to the outgoing resident at the time you process their security deposit return. Relevant documentation includes photographs, inspection forms or reports, receipts, invoices, and estimates that are relevant to the retention of deposit. Important note here: the additional documentation is required upon resident request, within 14 days of receiving the request. The letter is required at time of deposit settlement.
Electronic refunds and letters allowable. A major positive change from this law is the new allowance for electronic deposit refunds and emailed letters, with the approval of the resident. ACH transactions or other secured electronic transfer of funds can be utilized for the deposit refund, and the withholding letter can be either sent via mail, or electronic mail to any email address that the landlord or property owner has actual notice of.
Updates to carpet and paint replacement. A property manager, landlord, or owner cannot charge a resident for full carpet or paint replacement if only a portion of the carpet or paint is damaged beyond normal wear and tear. If only three walls in a room need to be painted, you cannot charge for the full room. Similarly, for carpet, if you can replace the damaged section of carpet, you cannot charge for the full replacement. Additionally, carpet has a statutory lifespan of ten years.
